Oil, Gas and the Trump Effect: AEC’s NJ Ayuk Breaks Down the Industry Shift

By Boris Esono Nwenfor

The African Energy Chamber (AEC) is doubling down on its international engagements to attract more investment into the continent’s oil and gas sector. With planned meetings in Geneva and Paris, the Chamber is looking to strengthen partnerships and reinforce Africa’s position as a key player in the global energy market.

“We’re going to continue engaging from the Chamber side because we don’t need to rest on our laurels,” said NJ Ayuk, Executive Chairman of the AEC. “We got a lot of new companies that are looking at African projects. That's what we need to do. We shouldn't stop short on engaging other participants regarding this, because this is what we need in Africa right now. We have to capture the momentum and drive a strong African message more than ever and be unapologetic about our drill baby, drill culture in Africa. It is paying off, and it will continue to.”

Speaking in an Interview with Arise News, the African Energy Chamber boss also touched on the energy policies of U.S. President Trump, balancing oil prices in the market and companies shifting away from green energy policies.

Less than a month in office, President Donald Trump’s energy policies have sparked a wave of optimism in the oil and gas industry. From opening new oil fields to rolling back regulations, the administration has made it clear that fossil fuels are a priority. Energy sector experts, including NJ Ayuk, Executive Chairman of the African Energy Chamber, see this as a turning point for global oil markets.

“We are seeing a president who believes in our drill, baby drill culture and not making fossil fuels a problem,” Ayuk said in the interview. “The energy industry is very pleased with what they’ve seen from President Trump so far.”

There's so much in just about three weeks of President Donald Trump in office. He's talking about big oil, the opening of new fields and so on. What do you make of that so far?

NJ Ayuk: I think it's a very good thing. We are seeing a president who believes in our drill, baby drill culture not making fossil fuels a problem and not working with the demonization of fossil fuels. You've seen a lot of new permits that are going to be issued in the United States, but also globally making sure that there's more oil and gas production. And I think the energy industry is very pleased by what they've seen from President Trump when it comes to oil and gas.

We have no one better, but a good friend in the Department of Energy Chris Wright, who is an oil man. He understands issues of the energy industry, he understands issues around a volatile industry and also ensuring that we have a stable oil market. We're going to see a lot of natural gas production, which we believe natural gas is clean and is going to really be able to solve a lot of crises around the world.

President Trump also asked OPEC to lower prices, was the vibe. So should OPEC, the APPO, the African Petroleum Producers Organization, the oil firms and importers, have sleepless nights over President Trump and his position on oil?

NJ Ayuk: No, they shouldn't have sleepless nights, because at the end of the day, OPEC is going to do what it has to do, APPO will do what they have to do, and President Trump would also do what he does normally. He wants to see the American citizens paying much less at the pump.

So, he's going to press for oil prices to come down. But it's not about what President Trump wants or what OPEC wants. We have to pay attention to demand. If demand is going to continue increasing, then you're going to see it show up with prices. Right now, you're looking at demand around about 99 to 103 million barrels a day. That is just what you're seeing. But with emerging countries coming over, more resources being needed by OECD countries and China and India, they are going to be the drivers of the oil prices and not OECD countries.

So, it's going to determine what production levels are. But also, you have to be careful about having prices too low, because the last time we had prices somewhere around $40, or $45, you saw an oil market crash because you saw WTI going even into its minus and it became a problem. We have to ensure that there is an adequate balance where producers can produce and still be profitable, and consumers can also be happy, but then there's funding to ramp up production where it is needed.

You need to find a balance. A volatile oil market is bad for America, bad for Europe, and bad for emerging countries. We think that we are going to find a way to keep the prices stable and not have a volatile oil market.

It's going to be a very tough one, isn't it, to balance so much oil in the market, big oil production, at the same time keeping prices at a very highly elevated level

NJ Ayuk: It's going to be achieved by demand. I mean, the Saudis could talk about a $90 barrel of oil. As an African, I want it to be at least $99 or $120. The truth of the matter is that we have seen a lot of issues with the oil industry not being able to drive new exploration programs. And right now, when we have a market with high oil prices, that is very good for Africa. It's very good for our revenue.
It's very good for us when we see the economic challenges that we have to face. But you've got to find balance. You can't go for boom or bust.

I think what the Saudis have done to the oil markets for a long time is that they have become that entity that has brought a lot of balance together with the OPEC plus market. They saved the global oil and gas industry, and credit must be given to them. We understand that we're going to continue having very strong conversations between OPEC and other multilateral producers, be it the American shale producers.

Don't forget, it's not going to be very easy to ramp up shale production to where it was when they had the shale revolution in 2013 and 2014 or 2015. Shale doesn't come on stream as fast, as people think. So, while we appreciate drill, baby, drill, you might have to go outside to those legacy producers that would be able to ramp up new production, new projects that would be able to meet global demand.

If we just shift a little bit in this conversation, are you seeing industry changes? One particular company took oil back under his name and removed energy. So, what does that mean?

NJ Ayuk: I mean, this is something we've always told them. You see how the moves of BP, you see the moves of shale. This renewable thing, it's not going to work as the thing. It is not profitable. It works very well when you have a lot of subsidies and incentivize renewable energy production. But you're also seeing a time when you're seeing shareholders and investors, they're demanding more from the companies, and they're seeing how, where the gas prices are going, are they looking at long-term predictions around gas, around oil, and they're also paying attention to the bankability on a lot of the renewable’s projects.

Look at the African continent. We've not been able to have a lot of renewable projects because our African governments are not able to subsidize renewable projects, just like you see in most Western countries. And you've seen that shift. There was a time when there was a shift to everything ESG or green with President Trump in the White House right now using his American bully pulpit.

There has been a shift. And you also saw that shift with the banks that said, we're not going to finance oil and gas. We're going to this net zero alliance. That alliance went, it breaks down so fast, like a glass of water that just got shattered within a week. But I also think that you are going to see a lot of companies scaling back on renewable projects, scaling back on green hydrogen projects. And that calls to question the bankability of a lot of renewable projects. Because at the end of the day, it's going to be about capital. Big businesses are not charitable organizations. They've got to make a profit. And you go where you can see profit.

Let's talk about some of the big oil and gas projects on the continent from Mozambique. TotalEnergies is looking to get back into the country to that $20 billion sort of project in South Africa and beyond. TotalEnergies is also involved in South Africa's drill, baby drill, as it were. Where are we right now?

NJ Ayuk: TotalEnergies is most likely going to spot a word or two in South Africa. That is huge. It might have some big discoveries in that same orange basin on the South African side. A big eye we're watching, and I'm going to be in Mozambique in the next three days, we're looking a lot about starting up the Mozambique LNG project with TotalEnergies in Cabo Delgado. Hopefully, that comes out first.

You've seen a lot that is going to happen with Exxon, with this LNG project on there. We just have to get the funding and other above-ground risk issues put together. But a lot to be excited about in Uganda, where you're going to see them going into fresh oil this year. Even Namibia, has seen a few setbacks from exploration campaigns, but TotalEnergies is moving forward with Venus, and they are going to be seeing maybe between 140 to 160 barrels of oil a day. So, some exciting projects are happening.

Today, Cosmos Energy made some big announcements on gas in the GTA area. So, movements are happening in Africa, but we need to be able to move things fast and get it. So, Africa's time has come. There's excitement around Africa when it comes to oil and gas, and we need it now more than ever.

Let's sum up the AUC's engagements with the African Energy Chamber, from that summit in Brazil to what to expect in France and then all the way down to Cape Town later in the year.

NJ Ayuk: I don't know if you can dance better than me, but you should have been with me in Brazil right when I got to the airport. I had all these beautiful dancers, and we had an amazing time. Brazil was a spectacular event. Petrobras had us hosted, and they went out big. They are looking at Africa.

They used to operate in Nigeria and Angola, but they're coming back big. They've got huge cash, willing to look at great African projects that they can participate in, Brazilian service companies. Look at what they've been able to do around the Santos Basins and other things. So, Brazil was an eye-opener for us, and being able to bring in a bunch of investors from Brazil that have been looking at African exploration, including Petrobras, is a good thing for Africa.

We're going to continue engaging from the chamber side because we don't need to rest on our laurels. Geneva, Mozambique, Paris, we have a lot of new companies that are looking at African projects.

That's what we need to do. We shouldn't stop short on engaging other participants regarding this, because this is what we need in Africa right now. We have to capture the momentum and drive a strong African message more than ever and be unapologetic about our drill baby, drill culture in Africa. It is paying off, and it will continue to.